Tax Pros Seeking Clues On Small Captive Insurance Cos.

Law360, Fort Wayne (October 13, 2017, 1:58 PM EDT) -- As the Internal Revenue Service continues to scrutinize the tax treatment of small captive insurance companies, tax practitioners are looking to a trio of cases before the U.S. Tax Court to discern where the lines will be drawn between legitimate insurers and shams.

The cases — one that has already been decided and two in which decisions are pending — are the court’s first to make it to trial over the intersection of captive insurance companies and Section 831(b) of the tax code, under which companies...